Business | Oil & Gas
Valdez compensation could be slashed
Almost 33,000 Alaskan victims of the disastrous Exxon Valdez oil spill could see their court-ordered payments reduced by more than half, to about $30,000 each, if the Supreme Court hands ExxonMobil Corp a partial victory in a long legal fight over punitive damages.
- AP
- Published: 00:30 February 29, 2008
Washington: Almost 33,000 Alaskan victims of the disastrous Exxon Valdez oil spill could see their court-ordered payments reduced by more than half, to about $30,000 each, if the Supreme Court hands ExxonMobil Corp a partial victory in a long legal fight over punitive damages.
The justices reached no firm conclusions in court on Wednesday, but they appeared to agree with Exxon that the $2.5 billion, or $75,000 a person, ordered by a federal court is excessive punishment for the massive 1989 spill.
Two justices, who could hold the balance of power in this case, suggested a payout of about $1 billion might be appropriate.
There was little talk in court of the plight of Alaskans who depended on the area's environment for their paycheques or of Exxon's run of record profits. Neither has much to do with the legal principles that underlie the case.
Exxon has fought to knock down or erase the punitive damages verdict by a jury in Alaska in 1994 for the accident that dumped 11 million gallons of oil into Prince William Sound. The spill fouled 1,930 kilometres of Alaskan coastline and led to the deaths of hundreds of thousands of seabirds and marine animals. The verdict has been cut in half once by a federal appeals court.
The problem for the people, businesses and governments who waged the lengthy legal fight against Exxon is that the Supreme Court in recent years has become more receptive to limiting punitive damages awards. The Exxon Valdez case differs from the others in that it involves issues peculiar to laws governing accidents on the water.
Overall, Exxon has paid $3.4 billion in fines, penalties, cleanup costs, claims and other expenses resulting from the spill.
It was less clear how the court would rule about whether the company should have to pay damages at all under the Clean Water Act and centuries-old laws governing shipping.
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